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City Of Austin Mulling Over Sales Tax Surplus


Registers have been ringing a lot more in Austin -- so much so, in fact, that the city now has millions of dollars in extra sales tax revenue. Now they're trying to decide what to do with that money.

The sales tax along with development revenue is giving the city $14.3 million in extra cash. But Mayor Lee Leffingwell is being cautious, "Sales tax revenue is always very volatile, it goes up and it goes down."

City Council members will now figure out how to spend it and they have a list of options that include keeping three hike and bike trails open 24 hours a day, wildfire mitigation and affordable housing.

In November, voters rejected a proposal to build more affordable housing in Austin, but the extra sales tax revenue could allow the city to invest $10.8 million into affordable housing. Deputy Chief Financial Officer Ed Van Eenoo says if the city doesn't spend that money on affordable housing now, it could lose millions in federal grants. "The danger is $30 million in federal tax credits that could go toward affordable housing to help our neediest residents will not come to the city if we don't take some action now," he says.

Mayor Leffingwell says the city needs to be careful how it spends the money because it may not be available next year. "We do need to have reserves, we always, every year, have unexpected expenses that will come up, lawsuit settlements, that kind of think so we need to be very careful about spending the tax payers money," he says.

City Council members could take up the issue as early as this Thursday or during a Feb. 12 work session.

By Lydia Pantazes